US Equity Futures Stable Ahead of Key Inflation Data

U.S. equity futures started the week with minimal changes, following a period where key stock benchmarks hit record highs, as investors awaited crucial inflation data expected later in the week. The stock market enters the last week of February on a strong note, thrilled by significant milestones and positive outcomes from the previous weeks, notably propelled by Nvidia's impressive earnings.

The focus now shifts to the longevity of the AI-driven momentum amid ongoing economic and inflationary concerns. In anticipation, investors are keenly awaiting the release of the monthly Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred measure of inflation, scheduled for Thursday. This week, attention is moving from corporate earnings to a variety of economic indicators, including the core PCE Price Index, a key metric monitored by the Fed for insights on inflation trends. Additionally, the U.S. GDP figures for the fourth quarter are set for release on Wednesday, and remarks from various central bank officials will be closely analyzed for hints about future interest rate directions.

Adding to the discourse, New York Fed President John Williams recently expressed optimism about the U.S. economy's trajectory and hinted at the possibility of easing interest rates later in the year. In a Friday interview, Williams emphasized the importance of adapting monetary policy based on consistent data indicating a decline in inflation towards the Fed's 2% target, suggesting a potential pullback from the current restrictive stance later this year.

The 18,000 level continues to act as resistance within the bullish channel, while 17,600 and 17,000 levels are identified as subsequent support levels. The Nasdaq continues to display strong momentum and a bullish direction, with the challenge lying in the sustainability of this movement.